Securities Association urges Congress to renew TRIA.Members from Commercial Mortgage Securities Association[R] (CMSA CMSA abbr. Consolidated Metropolitan Statistical Area [R]) took to Capitol Hill recently to urge members of Congress to renew the Terrorism Risk Insurance Act The Terrorism Risk Insurance Act (TRIA) is a United States federal law signed into law by President George W. Bush on November 26, 2002. The Act created a federal "backstop" for insurance claims related to acts of terrorism. (TRIA TRIA Terrorism Risk Insurance Act of 2002 TRIA Term Requirement in Average ). The act, passed by Congress in November 2002, created a federal reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. program requiring insurance companies that offer property and casualty insurance to also offer terrorism coverage to its policyholders. TRIA is set to expire at the end of this year unless members of Congress vote to renew the act before they adjourn adjourn v. the final closing of a meeting, such as a convention, a meeting of the board of directors, or any official gathering. It should not be confused with a recess, meaning the meeting will break and then continue at a later time. (See: recess, session) . "The rapidly expanding market for commercial mortgage backed securities (CMBS CMBS See: Commercial Mortgage Backed Securities ) would suffer dramatically from the failure to renew TRIA. This federal backstop allowed borrowers the opportunity to purchase affordable terrorism insurance Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities. It is considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very . This kept investors in the market and helped ensure that capital was available for the commercial real estate industry," said CMSA President Margie Custis. Ms. Custis explained that after 9/11 and before TRIA was enacted the market experienced severe ratings volatility. Property owners faced the possibility that terrorism insurance would be unavailable or limited. CMSA Chief Executive Officer Dottie Cunningham added, "TRIA helped stabilize the capital markets involvement in the commercial real estate industry. Since its passage the capital markets have continued to invest heavily in commercial real estate debt securities and this year's total investment is expected to exceed $130 billion. This level of investment has been one of the key drivers behind the continued growth of the commercial real estate industry, which has helped boost the overall U.S. economy in the last four years." The commercial real estate debt securities market has grown significantly over the past decade. There is currently more than $500 billion bonds outstanding and this year's investment exceeded the $100 billion mark in August, easily surpassing the $93 billion issued in 2004. This marked the second visit of CMSA members to the hill to show support for TRIA renewal. |
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